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The cannabis industry has huge growth prospects worldwide with early markets such as the U.S. and Canada providing an impressive indicator of what is to come.

Yet the combination of selling on the news in the wake of Canada's legalization of recreational marijuana and difficulties in the market as a whole, led to drops in cannabis stock valuations across the board in October. In addition, as stock analyst Jason Williams discussed in Wealth Daily, cannabis stocks were already due for a correction so recent stock movements of public cannabis companies do not necessarily indicate their long-term prospects.

With that in mind, investors shouldn’t be fazed. In fact, they should strongly consider getting in the cannabis business as early as now. Here are some cannabis stocks that have promising futures and may well be worth buying even with the current dip in the market:

Scotts Miracle-Gro

Scotts Miracle-Gro ( (SMG)) was one of the early cannabis players that were already a public company when it became clear that their products were popular among cannabis growers. Jason Williams pointed out that Scotts’ current benefit from cannabis growers is relatively small but will grow over time.

This promising company, however, is currently being hit by a Roundup lawsuit so it is experiencing what one might call a double dip. Despite this, many analysts still believe that the company will likely survive and still come out stronger than ever.

International Cannabis Corp.

Though hopes were high because of a technical breakthrough for International Cannabis Corp. ( (KNHBF), WRLD:CNX) at the beginning of October, the company also got caught up in the same dip that has brought marijuana stocks down across the board. But anticipated news, such as the likely upcoming announcement of a Greek medicinal license, may help get WRLD back on track.

As the National Inflation Association maintains, "WRLD is the #1 pure play in the international cannabis market." In addition, Auxly Cannabis invested $5 million into the company in September. And, as a company with multiple international licenses for cannabis cultivation, International Cannabis Corp. is definitely a tempting acquisition.

Of course, the most compelling reason to invest in International Cannabis Corp. is its strong possibility to go global. The company has a stronghold in the South American cannabis market. The company is currently expanding its facilities which promise of low-cost production and processing capacity. The company has an impressive estimated production capacity to over 450,000 kg per annum.

WRLD has two greenhouse facilities that are currently operational, an outdoor grow sites with approximate total area of over 800 acres, and is currently constructing two more production facilities. Apart from these developments, ICC is backed by a very significant investor: Aurora Cannabis, considered to be Canada’s second largest cannabis firm.

Aurora Cannabis invested $27 million and is considered to be WRLD’s strongest supporter to date.

Auxly Cannabis

Auxly Cannabis (CBWTF), which invested in International Cannabis Corp., was singled out in an analyst report for multiple technical reasons including a move above zero on the Twiggs Money Flow indicator, which is said to indicate the potential for the price to move higher. Other positive indicators include a reading of -82.89 on the Williams Percent Range which typically indicates a stock has been oversold.

Auxly Cannabis was also included in a report on marijuana stocks with high valuations. They are one of three stocks on the list described as having "unique business models" and being "worth watching." The report focuses on Auxly's status as a "commodity streamer" which doesn't "come into contact with cannabis." Instead, it makes deals to buy marijuana from growers and resells it once produced.

KushCo Holdings

KushCo Holdings ( (KSHB)) was another of the three stocks along with Auxly described as worth watching. KuchCo creates packaging for cannabis products and is benefiting from increased regulation around such packaging.

KushCo also appeared in "12 Marijuana Stocks to Buy Now in 2018" with a Consensus Buy Rating. As the article points out, KushCo "also operates a creative design agency for cannabis and non-cannabis brands that provide brand strategy, design and marketing, Web application development, and e-commerce solutions."

What stocks to avoid

One stock analyst recently identified three Canadian marijuana stocks that he believes have limited prospects because they can't sell a product in the U.S. and the international market is not yet leading to outside sales. As long as these stocks primarily operate in Canada, this analyst believes that though Canopy Growth Corporation ( (CGC)), Cronos Group Inc. ( (CRON)) and Tilray Inc. ( (TLRY)) are all listed in the U.S., they will all suffer from weak fundamentals.

When stocks drop, remember the larger picture

With a general weakness in the market and a "sell on the news" response to the legalization of recreational marijuana in Canada, even the best cannabis stocks were stymied in October. But with cannabis stocks down across the board it can be hard to identify which are worth buying on the dip. As the above examples indicate, each stock worth buying may be compelling for different reasons but all are examples of companies with long-term strength.

When considering which cannabis stocks to buy, always remember the long-term picture and focus on what you value whether drawing upon a technical analysis, potential business deals, positioning in the market or analyst recommendations.

DISCLOSURE:
I don't have any financial interests or connection with any of the companies mentioned in this article.

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